Davie firm accused of sending 12,000 fake letters to get money from new firms

June 14, 2013|By Donna Gehrke-White, Sun Sentinel

A Davie company is accused of bilking new companies by pretending to be a state entity that needed more fees to complete the process of the firms becoming Florida corporations.

The Florida Attorney General's Office filed a lawsuit Friday to stop the Florida Center of Corporations and its owner, Thomas H. Fred Jr., from sending the deceptive letters.

More than 12,000 Florida businesses so far have paid fees to the center in response to its mailings since February, according to the state's lawsuit.

The Florida Center of Corporations is accused of sending thousands of documents that resembled those from the state Division of Corporations to businesses throughout Florida. The mailings stated the companies had "one step left" in their incorporation application. The Florida Center of Corporations then requested a payment, ranging from $45 to $54, be mailed to it so the new firms could obtain "official" documents stating that they are corporations.

The center's owner, Fred, did not return phone calls on Friday. A woman answering another phone listed as Fred's said he wasn't at the address.

Groups such as the Flagler County Chamber of Commerce have been warning new businesses of the center's fraudulent request. "Help spread the word of this SCAM," the chamber urged on its website last month.

The Better Business Bureau gave the company an F after the center, that's address is listed as 4650 SW 51rst St. in Davie, did not respond to at least two requests for information about its business. State records show the company has only been operating since February. Another firm connected to Fred — L Seven Development, a motorcycle parts and supply business — also has an F from the Better Business Bureau after it didn't respond to 10 complaints.

The state's lawsuit seeks to prevent the Florida Center of Corporations from doing business and asks Fred to pay restitution to consumers who have already sent money to the center.

"A company misrepresenting itself as a state entity and obtaining funds based on that deception is violating the Florida Unfair and Deceptive Trade Practices Act," Attorney General Bondi said in a written statement. "Thousands of Florida businesses have been harmed, and my office is committed to stopping this deceptive activity."

The state has posted a warning on its website advising businesses to beware of such deceptive solicitations.

Businesses that have been affected can call the Attorney General's toll-free fraud hotline at 866-966-7226 or file a complaint online at MyFloridaLegal.com.